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Analysts at Deutsche Bank suggest that today’s FOMC minutes  should be of particular interest, especially with the Powell led-Fed growing more comfortable with inflation moving back to target, as the latest data has shown.

Key Quotes

“In terms of what to look out for,  our US economists believe that discussion regarding trade developments and the flattening yield curve will be of note  given recent comments by Fed officials. Regarding the former, many policymakers have mentioned this as a key risk to their outlook. As Powell acknowledged in both his press conference and his Sintra appearance, there are rising anecdotal reports of concern about trade from the Fed’s business contacts.”

“Other Fed policymakers have also echoed this sentiment. The flattening yield curve has elicited differing views among policymakers, with some Fed officials such as Chair Powell, Governor Brainard and NY Fed Williams downplaying its significance, while other regional Fed presidents have voiced concerns.”

“It is possible we will see some discussion on the Fed’s balance sheet policy given that interest on excess reserves (IOER) was raised five bps less than the target range for the policy rate. Our economists however doubt the Fed is contemplating any imminent changes to the pace of balance sheet roll off at present. We shall find out more soon.”